Committed investments registered with the Board of Investments (BOI) recorded P645.3 billion in the first six months of the year, jumping 112 percent from just P304.4. billion in the same period in 2019, driven by the registration of San Miguel Corporation’s P530.8 billion Bulacan airport project.
The BOI reported that aside from San Miguel Aerocity, Inc.’s P530.8 billion airport project in Bulacan, there were a few big ticket petroleum and energy projects that registered during the January-June period this year.
Some of these projects include Seaoil’s P654 million downstream petroleum project in La Union, Gigasol3 Inc.’s P2.4 billion 63 MW solar project in Central Luzon, Royale Cold Storage North Inc.’s Php1.5 billion storage facility in Laguna and Heineken International BV’s P1 billion brewery plant in the Metro.
The BOI also approved two projects of Cebu Air Inc. for the acquisition of two aircraft A33ONE0#7 to fly Manila-Hong Kong-Manila and Manila-Shenzhen-Manila routes. The other aircraft was A330NE#6. These two aircraft, with Civil Aviation Board registrations, have total investments of P6.596 billion. Also approved were Solarace 1 Energy Corp. for its P4.206 billion 120 mw solar project in Alamios, Laguna, and Prime Land Inc. for its P3.569 billion low cost mass housing project in Bulacan.
Regionally, Central Luzon is tops with P538.1 billion by virtue of the large Bulacan airport; NCR is second with P85.4 billion; Calabarzon is third with P9.2 billion; followed by Davao Region (P4.6 billion) and Northern Mindanao (P3.2 billion).
Of the approved investment pledges, P626.7 billion were contributed by Filipino businesses. It is 166 percent higher than the P235.6 billion from the same period last year. In contrast, approved figures by foreign businessmen only reached P18.6 billion, a 73 percent deceleration as compared to P68.9 billion in the same period a year ago.
BOI Managing Head Ceferino S. Rodolfo said construction/infrastructure is the pace-setter among industries with P530.8 billion as of the first half. The transportation and storage sectors remain strong with P86.7 billion, a 785 percent improvement from last year’s figure of just P9.8 billion. Real estate posted a solid a 16.5 percent growth to Php9 billion from P7.7 billion in 2019. Renewable energy/power, manufacturing and accommodation (tourism) recorded P6.6 billion, P5.3 billion and P3.8 billion in approved projects, respectively.
A total of 96 project got the green-signal and upon operations, it will generate 27,082 jobs, a jump of 57.3 percent from 17,214 in the same period last year, Rodolfo said.
Among foreign investors, France contributed the largest investments of P1.5 billion followed by Netherlands with P1.06 billion. Japan remained third with P790 million and Malaysia places fourth with P601 million and India fifth with P329 million.
“The robust bounce back despite the pandemic shows the country’s resilience as we begin the transition to easing out the restrictions after a prolonged lockdown of the economy. While we expect a lower GDP output in the second quarter than the first quarter due to the ECQ, there are already signs that the economy is humming back to life with industry conditions becoming stable,” Trade Secretary and BOI Chairman Ramon M. Lopez said.
Lopez cited that the rebound in investments is expected since the Philippines is still considered one of the top investment destinations with strong economic fundamentals, and direct investments always have a medium to long-term horizon in their investment decisions.
He cited that the country’s manufacturing sector is close to stability as the Philippine Manufacturing Purchasing Managers’ Index (PMI) survey of IHS Markit showed that the manufacturing index score increased to 49.7 in June 2020, up from 40.1 in May. The country recorded an increase in its output index, the first monthly increase in four months. The output index in June was 51.1, coming from a low of 10.2 in April and 29.4 in May. Indices below 50 show a decrease in manufacturing output while above 50 mirrors an improvement of activity. The change in community rules boosted the manufacturing output in making inroads towards stability at the end of the first half of the year. Companies have begun to increase their production as they reopened operations after a long shutdown.
Lopez added that he expressed optimism that the economy will recover by the third quarter with a positive growth as most of the country is expected to have a relaxed form of community quarantine although he acknowledged that strict social distancing and health protocols will still remain in effect to contain the spread of COVID-19.
“It is important to highlight the strategic nature of the projects and their important contribution towards building a more modern Philippines. The project proponents have reaffirmed their commitment to the immediate implementation of these infrastructure, ICT and transport projects—towards completion in the medium-to long-term term. Prior to approval of the big-ticket projects, the BOI required them to provide written confirmation of their commitment,” added Lopez.